Impact of Internal Controls on Fraud Detection and Prevention in the Kenyan Public Sector a Case Study of Public Universities

Abstract

The objective of the study was to determine how and the extent to which internal controls impact on fraud detection and prevention among public universities in Kenya. It also aimed at reviewing the increasing body of theoretical and empirical studies that have endeavored to examine the range of magnitude and effects of internal controls on fraud detection and prevention. The study employed a A descriptive cross-sectional research design. The target population was all the 31 public universities in Kenya. Primary sources of data were employed, and data was collected on; fraud detection and prevention, strong internal controls, management accounting controls, strong fraud audit functions, policy compliance, and separation of duties. It was a cross-sectional study done across the 31 public universities at the same time period. The study applied correlation analysis and multiple linear regression equation with the technique of estimation being Ordinary Least Squares (OLS) so as to establish the relationship of internal controls on fraud detection and prevention. The study found that a significant positive association exists between policy compliance and fraud detection and prevention. The other predictor variables employed in the study did not have an effect on the response variable. The study concluded that that higher levels of policy compliance lead to higher levels of fraud detection and prevention. The study recommended that the governments formulates strong internal controls in public universities and other public institutions in order to curb fraud. The same recommendations can also be made to private firms. Management of public and private organizations alike can strengthen internal controls particularly enforcing policy compliance to mitigate fraud